US semiconductor company Qualcomm yesterday rejected Broadcom's revised $121-billion buyout offer, but proposed a meeting to see whether the bid's ''serious deficiencies in value and certainty'' could be addressed.
Some Qualcomm shareholders had urged the company in recent days to engage with its rival and explore the possibility of entering into an attractive deal.
In response to Broadcom's offer to meet by this weekend, Qualcomm said it would not meet until Tuesday, after the two companies' had met with their respective proxy advisors Glass Lewis and ISS.
''We hope that your willingness to meet with us reflects Qualcomm's genuine intent to reach an agreement with respect to our February 5 proposal,'' Broadcom CEO Hock Tan told Qualcomm executive chairman Paul Jacobs in a letter published by Broadcom.
Broadcom added that its latest offer was ''best and final'' and had strong Qualcomm stockholder support.
In November, Qualcomm had rejected Broadcom's first unsolicited $103-billion acquisition offer without engaging further and in response Broadcom nominated a slate of directors to replace Qualcomm's board.
Qualcomm shareholders would vote on these nominations at a 6 March meeting.
According to Qualcomm, the latest $82 per share offer from Broadcomm, comprising $60 per share in cash and $22 per share in stock, ''materially undervalues'' Qualcomm and falls short of the regulatory commitment it would demand, given the significant anti-trust risks involved.
According to commentators, Qualcomm's second dismissal of Broadcom's approach puts the focus on the shareholder vote scheduled on 6 March. It would be decided at the meeting whether to replace the smartphone-chipmaker's board with Broadcom's own nominees.
They add that the vote would decide between Broadcom's strategy, under Tan, of acquiring companies and focusing on boosting profits, or Qualcomm management's promise of future growth fuelled by investment in new products and technology.
"Your proposal is inferior relative to our prospects as an independent company and is significantly below both trading and transaction multiples in our sector," Jacobs wrote in an open letter to Broadcom's Tan.